693.002/1114: Telegram

The Consul General at Shanghai ( Lockhart ) to the Secretary of State

1142. My 1074, August 13, 1 p.m.; and my 1114, August 18, 1 p.m. Sir Frederick Maze has addressed a further letter to me, dated August 21, stating that he is anxious to avoid if possible adopting independent action which may either run contrary to the wishes of interested powers or be calculated to weaken any representations they may be making in Tokyo in connection with the customs situation here. Sir Frederick intimates that due to the financial embarrassment of the Inspectorate he may be obliged to assume personal responsibility independently of the Chungking Government and the interested powers and undertake to appoint a commissioner of Japanese nationality at Shanghai. He is in the greatest quandary and is giving consideration to the question of whether to refer the matter to the Minister of Finance59 which would virtually mean inviting negative instructions or declining to accept the Japanese “demand” for a Japanese Commissioner for the integrity of the service cannot, in Sir Frederick’s opinion, be maintained. The latter also states if the Minister of Finance were to undertake to finance the Inspectorate [with?] funds from free China Japanese requirements [respecting?] the commissionership would not be satisfied and the Inspectorate’s authority throughout occupied China would cease to exist. Inspector General further points out that he has been for some time, in the administration of the customs service, submitting to what amounts to force majeure and he seeks to have the interested powers indorse his action if he is similarly required to act in connection with the appointment of a Japanese Commissioner. He holds that to assume an unyielding attitude would precipitate the disruption of the service.

I have made no commitments either in writing or orally to the Inspector General in connection with the pending problem, having confined myself to the mere statement that his views have been communicated to the Department and to the Ambassador. As previously reported, I have informed Sir Frederick that Ambassador Grew had made appropriate representations at Tokyo. The Inspector General finds himself in the unfortunate position where if he appoints a Japanese Commissioner he will displease his superiors in Chungking and if he declines to meet their wishes funds will not be available to him for paying the expenses of the Inspectorate General. I see no way [Page 811] to assist him in his dilemma beyond the suggestion set forth near the end of my 1074, August 13, 1 p.m. reference telegram.

Sent to the Department, repeated to Chungking, Peiping, code text by airmail to Tokyo.

Lockhart
  1. H. H. Kung, at Chungking.